[Congressional Record Volume 159, Number 50 (Monday, April 15, 2013)]
[House]
[Pages H2001-H2004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             CONTRACTING AND TAX ACCOUNTABILITY ACT OF 2013

  Mr. ISSA. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 882) to prohibit the awarding of a contract or grant in excess of 
the simplified acquisition threshold unless the prospective contractor 
or grantee certifies in writing to the agency awarding the contract or 
grant that the contractor or grantee has no seriously delinquent tax 
debts, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 882

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Contracting and Tax 
     Accountability Act of 2013''.

     SEC. 2. GOVERNMENTAL POLICY.

       It is the policy of the United States Government that no 
     Government contracts or grants should be awarded to 
     individuals or companies with seriously delinquent Federal 
     tax debts.

     SEC. 3. DISCLOSURE AND EVALUATION OF CONTRACT OFFERS FROM 
                   DELINQUENT FEDERAL DEBTORS.

       (a) In General.--The head of any executive agency that 
     issues an invitation for bids or a request for proposals for 
     a contract in an amount greater than the simplified 
     acquisition threshold shall require each person that submits 
     a bid or proposal to submit with the bid or proposal a form--
       (1) certifying that the person does not have a seriously 
     delinquent tax debt; and
       (2) authorizing the Secretary of the Treasury to disclose 
     to the head of the agency information limited to describing 
     whether the person has a seriously delinquent tax debt.
       (b) Impact on Responsibility Determination.--The head of 
     any executive agency, in evaluating any offer received in 
     response to a solicitation issued by the agency for bids or 
     proposals for a contract, shall consider a certification that 
     the offeror has a seriously delinquent tax debt to be 
     definitive proof that the offeror is not a responsible source 
     as defined in section 113 of title 41, United States Code.
       (c) Debarment.--
       (1) Requirement.--Except as provided in paragraph (2), the 
     head of an executive agency shall initiate a suspension or 
     debarment proceeding against a person after receiving an 
     offer for a contract from such person if--
       (A) such offer contains a certification (as required under 
     subsection (a)(1)) that such person has a seriously 
     delinquent tax debt; or
       (B) the head of the agency receives information from the 
     Secretary of the Treasury (as authorized under subsection 
     (a)(2)) demonstrating that such a certification submitted by 
     such person is false.
       (2) Waiver.--The head of an executive agency may waive 
     paragraph (1) with respect to a person based upon a written 
     finding of urgent and compelling circumstances significantly 
     affecting the interests of the United States. If the head of 
     an executive agency waives paragraph (1) for a person, the 
     head of the agency shall submit to Congress, within 30 days 
     after the waiver is made, a report containing the rationale 
     for the waiver and relevant information supporting the waiver 
     decision.
       (d) Release of Information.--The Secretary of the Treasury, 
     in consultation with the Director of the Office of Management 
     and Budget, shall make available to all executive agencies a 
     standard form for the authorization described in subsection 
     (a).
       (e) Revision of Regulations.--Not later than 270 days after 
     the date of enactment of this subsection, the Federal 
     Acquisition Regulation shall be revised to incorporate the 
     requirements of this section.

[[Page H2002]]

     SEC. 4. DISCLOSURE AND EVALUATION OF GRANT APPLICATIONS FROM 
                   DELINQUENT FEDERAL DEBTORS.

       (a) In General.--The head of any executive agency that 
     offers a grant in excess of an amount equal to the simplified 
     acquisition threshold shall require each person applying for 
     a grant to submit with the grant application a form--
       (1) certifying that the person does not have a seriously 
     delinquent tax debt; and
       (2) authorizing the Secretary of the Treasury to disclose 
     to the head of the executive agency information limited to 
     describing whether the person has a seriously delinquent tax 
     debt.
       (b) Impact on Determination of Financial Stability.--The 
     head of any executive agency, in evaluating any application 
     for a grant offered by the agency, shall consider a 
     certification that the grant applicant has a seriously 
     delinquent tax debt to be definitive proof that the applicant 
     is high-risk and, if the applicant is awarded the grant, 
     shall take appropriate measures under guidelines issued by 
     the Office of Management and Budget for enhanced oversight of 
     high-risk grantees.
       (c) Debarment.--
       (1) Requirement.--Except as provided in paragraph (2), the 
     head of an executive agency shall initiate a suspension or 
     debarment proceeding against a person after receiving a grant 
     application from such person if--
       (A) such application contains a certification (as required 
     under subsection (a)(1)) that such person has a seriously 
     delinquent tax debt; or
       (B) the head of the agency receives information from the 
     Secretary of the Treasury (as authorized under subsection 
     (a)(2)) demonstrating that such a certification submitted by 
     such person is false.
       (2) Waiver.--The head of an executive agency may waive 
     paragraph (1) with respect to a person based upon a written 
     finding of urgent and compelling circumstances significantly 
     affecting the interests of the United States. If the head of 
     an executive agency waives paragraph (1) for a person, the 
     head of the agency shall submit to Congress, within 30 days 
     after the waiver is made, a report containing the rationale 
     for the waiver and relevant information supporting the waiver 
     decision.
       (d) Release of Information.--The Secretary of the Treasury, 
     in consultation with the Director of the Office of Management 
     and Budget, shall make available to all executive agencies a 
     standard form for the authorization described in subsection 
     (a).
       (e) Revision of Regulations.--Not later than 270 days after 
     the date of the enactment of this section, the Director of 
     the Office of Management and Budget shall revise such 
     regulations as necessary to incorporate the requirements of 
     this section.

     SEC. 5. DEFINITIONS AND SPECIAL RULES.

       For purposes of this Act:
       (1) Person.--
       (A) In general.--The term ``person'' includes--
       (i) an individual;
       (ii) a partnership; and
       (iii) a corporation.
       (B) Exclusion.--The term ``person'' does not include an 
     individual seeking assistance through a grant entitlement 
     program.
       (C) Treatment of certain partnerships.--A partnership shall 
     be treated as a person with a seriously delinquent tax debt 
     if such partnership has a partner who--
       (i) holds an ownership interest of 50 percent or more in 
     that partnership; and
       (ii) has a seriously delinquent tax debt.
       (D) Treatment of certain corporations.--A corporation shall 
     be treated as a person with a seriously delinquent tax debt 
     if such corporation has an officer or a shareholder who--
       (i) holds 50 percent or more, or a controlling interest 
     that is less than 50 percent, of the outstanding shares of 
     corporate stock in that corporation; and
       (ii) has a seriously delinquent tax debt.
       (2) Executive agency.--The term ``executive agency'' has 
     the meaning given such term in section 133 of title 41, 
     United States Code.
       (3) Seriously delinquent tax debt.--
       (A) In general.--The term ``seriously delinquent tax debt'' 
     means an outstanding Federal debt under the Internal Revenue 
     Code of 1986 for which a notice of lien has been filed in 
     public records pursuant to section 6323 of such Code.
       (B) Exceptions.--Such term does not include--
       (i) a debt that is being paid in a timely manner pursuant 
     to an agreement under section 6159 or section 7122 of such 
     Code; and
       (ii) a debt with respect to which a collection due process 
     hearing under section 6330 of such Code, or relief under 
     subsection (a), (b), or (f) of section 6015 of such Code, is 
     requested or pending.

     SEC. 6. EFFECTIVE DATE.

       This Act shall apply with respect to contracts and grants 
     awarded on or after the date occurring 270 days after the 
     date of the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Issa) and the gentleman from Maryland (Mr. Cummings) 
each will control 20 minutes.
  The Chair recognizes the gentleman from California.


                             General Leave

  Mr. ISSA. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.

                              {time}  1730

  Mr. ISSA. Mr. Speaker, I yield myself such time as I may consume.
  H.R. 882, the Contracting and Tax Accountability Act of 2013, is, in 
fact, a broadly bipartisan bill introduced by Mr. Chaffetz of Utah and 
Ms. Speier of California. They recognize that, in fact, contractors 
and, in a companion bill, individual Federal employees have a high 
standard, a high responsibility, and one of the least of those 
responsibilities is to pay their taxes in a timely fashion.
  Sadly, we discover that, on occasions, we find ourselves with 
contractors who have not met that responsibility. Most often, those 
contractors, by not meeting that responsibility, may have, in fact, not 
deposited the withholding of the very workers who are working on our 
behalf.
  This kind of irresponsible behavior, although not always found, is 
found often enough that GSA contractors are estimated to owe over $3 
billion in taxes that are in arrears, and nearly $1.4 billion seriously 
in arrears.
  The bill makes tax compliance both a prerequisite for receiving a 
contract or being an agent and, in fact, recognizes that those who do 
not make good on their taxes may, in fact, be seen as eligible for 
potential suspension or debarment.
  Federal contractors, for the most part, do comply and they do comply 
very well. But I believe that what Ms. Speier and Chairman Chaffetz 
have done is recognize that we must have zero tolerance for people who, 
even after being recognized, and who are seriously behind and 
delinquent, continue to resist paying their just taxes.
  Again, often these taxes have nothing to do with a debate about 
income tax but, rather, withholding that simply wasn't done. These 
kinds of contractors are, by definition, the ones also likely to not 
live up to the high standard that the taxpayers expect by our 
contractors.
  With that, I reserve the balance of my time.
  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I want to, first of all, thank Congressman Chaffetz and 
Congresswoman Speier for introducing this very, very important piece of 
legislation. And I rise in strong support of H.R. 882, the Contracting 
and Tax Accountability Act.
  This bill is very similar to legislation passed by the House in the 
110th Congress, and I supported it then, and I surely support it now. 
The bill enjoys bipartisan support. It is noncontroversial. Last month 
it was considered by the Oversight Committee and passed unanimously.
  GAO has reported that government contractors owed more than $5 
billion in unpaid Federal taxes in 2004 and 2005. Unpaid tax, taxes 
owed by contractors, included payroll taxes as well as corporate income 
taxes.
  GAO has also found that some contractors with unpaid tax debts are 
repeat offenders that have failed to pay their taxes over many years, 
including, in one case, for almost 20 years.
  H.R. 882 would allow the Federal Government to ensure that 
contractors seeking to do business with the Federal Government have 
paid their taxes before they can receive a Federal contract.
  The Federal Acquisition Regulation was revised in 2008 to require 
contractors to certify that they do not owe a delinquent tax debt to 
the Federal Government. The bill builds on that requirement by 
providing Federal agencies the means to verify contractors' claims.
  The legislation will also ensure that responsible contractors no 
longer have to compete with tax delinquents.
  Mr. Speaker, I urge my colleagues to support this important piece of 
legislation in order to preserve the fairness in the contracting 
process.
  I also take a moment to salute our chairman, Mr. Issa, for making 
sure that this bill reached the floor. And so with that, we will now be 
able to address some of these deadbeat contractors.

[[Page H2003]]

  I reserve the balance of my time.
  Mr. ISSA. Mr. Speaker, it's now my honor to yield such time as he may 
consume to the gentleman from Utah (Mr. Chaffetz), the author of this 
bill, a champion for accountability of the Federal workforce and 
Federal contractors.
  Mr. CHAFFETZ. Mr. Speaker, I thank Chairman Issa for his unyielding 
support in pursuit of good government. And I thank him for his support 
of this piece of legislation moved forward.
  I also thank Ranking Member Cummings, in working with him and his 
staff, and certainly with Representative Speier, who also shares his 
passion of making sure that contractors are held responsible for their 
actions.
  Mr. Speaker, today, tens of millions of individuals and corporations 
all across America will file their Federal tax returns and pay back any 
money they owe the Federal Government.
  However, unfortunately, Mr. Speaker, there will be some who fail to 
meet this obligation and simply refuse to pay the taxes they owe.
  This legislation, H.R. 882, the Contracting and Tax Accountability 
Act, has a very simple purpose: to prohibit companies with serious 
delinquent Federal tax debts from doing business with the Federal 
Government and receiving new Federal contracts. Since Federal 
contractors draw compensation and funding from taxpayer dollars, we 
must ensure that they are complying with existing laws and paying their 
own taxes.
  Mr. Speaker, just last month this legislation passed through the 
Oversight and Government Reform Committee by voice vote, and it is 
identical to legislation that also unanimously passed the committee 
last Congress.
  Going back a little further, Mr. Speaker, in both the 110th and the 
111th Congress, former Congressman Brad Ellsworth of Indiana introduced 
very similar versions of this bill. And in the 110th Congress, the 
legislation passed the House again by voice vote.
  It begs the question what's happening over there in the United States 
Senate, but we will continue to pursue this to make sure this 
legislation passes.
  Also back in the 110th Congress, then-Senator Barack Obama sponsored 
the Senate companion, Contractor and Tax Accountability Act, to 
Congressman Ellsworth's legislation but, unfortunately, the legislation 
did not progress in either Chamber then.
  As President, Mr. Obama has continued to fight for the contractors to 
be held accountable. I concur with the President on this issue. This is 
bipartisan.
  We're going to lead and spearhead this effort here in the House of 
Representatives and make sure that it becomes law, but the United 
States Senate is going to actually have to step up and do something at 
some point in life, Mr. Speaker.
  This is a good piece of legislation. H.R. 882 establishes the process 
through which persons with serious delinquent Federal tax debts may be 
prohibited from receiving Federal contracts and grants. The legislation 
is designed to mandate that tax compliance be a prerequisite for 
receiving a Federal contract or a grant.
  As the chairman knows, the Federal Acquisition Regulation, known as 
the FAR, was revised in 2008 to require contractors to certify they do 
not have delinquent tax debt to the Federal Government. Under the FAR 
revision, if a contractor is delinquent, then the standard Government-
wide suspension and debarment process occurs in order to hold the 
contractor accountable.

  H.R. 882 would, in essence, codify that regulation and provide a 
means to verify the contractor's certification. The legislation also 
provides broad exceptions for debts being paid in a timely manner, and 
debts to which a due process hearing has been requested or is pending.
  Like the Federal Employee Tax Accountability Act, to be considered 
next, this legislation is meant to affect those thumbing their nose at 
Uncle Sam and the United States of America.
  The Government Accountability Office, the GAO, has reported that 
government contractors owe over $5 billion in unpaid Federal taxes. 
Many of the contractors have repeatedly failed to fulfill their tax 
obligations and have delinquencies that have extended over multiple tax 
periods.
  GAO even identified instances in which companies that are delinquent 
in their taxes have won contracts by submitting lower offers than 
companies that comply with their tax obligations, giving them an undue 
advantage.
  Those who consciously ignore the channels in place to fulfill their 
tax obligations must be held accountable, and they must play on the 
same even playing field. This legislation will do just that.
  I urge my colleagues to join me in supporting this commonsense, 
bipartisan piece of legislation. I again thank Chairman Issa for his 
support, as well as Ranking Member Cummings.
  Mr. CUMMINGS. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
California (Ms. Speier), the cosponsor of this legislation.
  Ms. SPEIER. Mr. Speaker, I want to thank the ranking member for 
allotting me some time to speak on this bill, and to our chairman, Mr. 
Issa, for moving this bill forward, and to my colleague, Mr. Chaffetz 
from Utah, who is the author of this measure.
  Imagine what our constituents are thinking right now. Imagine if they 
really knew that while they're scurrying around trying to get their tax 
returns filed on time and making sure they have adequate funds in their 
accounts to write out that check, that there are corporations in this 
country that continue to get contracts from the United States of 
America, even though they don't pay their taxes.
  So this bill will ensure that taxpayer dollars due today only go to 
responsible contractors who do not have significant debts to the 
Federal Government. This bill will make it clear to all contracting 
officials: no more tax money for deadbeat contractors.

                              {time}  1740

  As it stands, delinquent contractors are not only eligible for future 
contracts, but they actually get them. With one of the largest budgets 
in the Federal Government, the Defense Department already has a 
reputation for letting contractors fleece taxpayers. And to underscore 
this point, when the Defense Department needed a new PR contractor, 
they settled on a company that still owed $4 million in taxes. How can 
we allow that to happen?
  Another company that owed the Federal Government a million dollars in 
taxes was paid an additional million dollars as a contractor from the 
Department of Defense. Instead of using the money to pay back the 
government, what did he do with the money? He bought a boat, some cars, 
and a home overseas.
  Even the IRS, the agency responsible for collecting our taxes, has 
fallen down on the job of making sure that our taxpayer dollars only go 
to contractors who have paid them. The Inspector General found the IRS 
gave 11 companies $356 million in contracts despite owing millions of 
dollars themselves.
  So the question is, Why would we reward scofflaws?
  Let's get this done this year. And I would suggest to my colleagues 
on the other side of the aisle if in fact the Senate is the logjam, if 
that's what is going to prevent this from taking effect, let's co-write 
a letter to the President of the United States and ask him under his 
powers of executive order to take the steps necessary to put this in 
place so that we don't continue to have contractors who do not pay 
their taxes getting rewarded with contracts by the Federal Government.
  Mr. ISSA. Mr. Speaker, at this time I have no further requests for 
time, and I reserve the balance of my time.
  Mr. CUMMINGS. Mr. Speaker, how much time do I have remaining?
  The SPEAKER pro tempore. The gentleman has 14\1/2\ minutes remaining.
  Mr. CUMMINGS. Mr. Speaker, I yield 3 minutes to the gentlelady from 
Washington, D.C. (Ms. Norton).
  Ms. NORTON. Mr. Speaker, I just wanted to thank Mr. Chaffetz and Mr. 
Issa for this bill.
  Initially, there was a bill involving only Federal employees. And we 
had a concern that often when bills come forward for Federal employees, 
they are not bills that recognize the substantial funds that 
contractors receive. And Chairman Issa and Chairman Chaffetz looked 
closely at it and now have come forward with a contractor's bill as 
well.
  I do want to say in light of the fact that I'm going to oppose the 
next bill--

[[Page H2004]]

and I do believe there's a difference between employees and 
contractors, and I don't want to get into that right at this moment--I 
do want to say that for Federal employees undergoing a pay freeze and 
furloughs, there's one thing Uncle Sam can do that apparently hasn't 
been done with many contractors. He can garnish wages. And you can bet 
your bottom dollar if there's a Federal employee that owes taxes and 
you can prove that money is owed to the Federal Government, his pay 
will be garnished.
  But as we heard the gentlelady from California say, these contractors 
continue to receive the largesse--I guess that's how they regard it--of 
the Federal Government. It certainly can be distinguished in that way. 
But I do believe that the chairman of the full committee and the 
subcommittee deserve credit for, in fact, moving at least where they 
saw that there should be some equity, that contractors would be treated 
similarly to Federal employees.
  Mr. ISSA. I continue to reserve the balance of my time.
  Mr. CUMMINGS. Having no further requests for time, Mr. Speaker, I 
urge Members to vote in favor of this legislation, and I yield back the 
balance of my time.
  Mr. ISSA. Mr. Speaker, I yield myself such time as I may consume.
  I made a decision to bring these two bills separately, rather than 
combine them, for a reason. This is not controversial, but failed to 
get through the Senate. The other bill has some controversy. But I'd 
like to say that in fact I believe that both bills would tell the 
American people--both the one related to contractors and the next one 
we'll be considering related to Federal employees--that we hold 
ourselves to the standard that the American people, the American 
taxpayer, expects us to.
  So although I know that Ms. Norton does not support the next bill, 
but with the kind of vigor and optimism and positive discussion that 
we've heard on the previous two bills and on this, I would say that the 
important thing for all of us to understand is the money here is 
significant; but the principle of holding our contractors, and in the 
next bill ourselves, responsible to a high level of integrity and not 
having those continue without us taking note of it, I think offers the 
same statement to the American people at a time of sequestration, at a 
time in which we're questioning how much we can afford from our 
government.
  For that reason, I want these bills to be considered separately. I 
intend to vote for both of them. I believe both of them have merit for 
the same reason; but I do thank my colleagues on the other side because 
this bill, I believe, is truly without controversy and would be without 
controversy. I ask all of those here to note that we, on a unanimous 
basis, support H.R. 882. I ask its support, and I yield back the 
balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Issa) that the House suspend the rules 
and pass the bill, H.R. 882, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. ISSA. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

                          ____________________